Exam 7: Foreign Direct Investment

Scenario: Blickinstock at the Crossroads Auto parts supplier,Blickinstock Ltd. ,would like to expand its presence in Latin America.To that end,Blickinstock is trying to decide whether to purchase an existing company in a remote region of Argentina or build its own subsidiary.Keith Moon,Blickinstock's vice president of global business development,will be making a presentation to the board outlining the company's options. -Blickinstock has identified a company that would be open to merger or acquisition.Which of the following is NOT a reason to go ahead with the merger?

Which of the following statements is NOT true?

Scenario: Blickinstock at the Crossroads Auto parts supplier,Blickinstock Ltd. ,would like to expand its presence in Latin America.To that end,Blickinstock is trying to decide whether to purchase an existing company in a remote region of Argentina or build its own subsidiary.Keith Moon,Blickinstock's vice president of global business development,will be making a presentation to the board outlining the company's options. -One board member has asked about the maquiladora phenomenon,which refers to ________.

A country's ________ is a national accounting system that records all payments to entities in other countries and all receipts coming into the nation.

According to the eclectic theory,each of the following advantages must be present for a company to undertake foreign direct investment EXCEPT ________.

Scenario: Global Manufacturing,Inc.(GMI) GMI is a fast-growing Canadian company that wants a production system that makes each of its product's two components in the location where the cost of production is lowest.The components will then be taken to maquiladoras for final assembly.GMI purchased an existing company in Brazil to produce component A and built a subsidiary in Thailand to produce component B. -GMI's purchase of the Brazilian company can be best classified as a(n)________.

Scenario: Happyland Happyland,a country of about 48 million people with beautiful beaches,vast natural resources,and a highly skilled labour force,is encouraging foreign direct investment inflows.The country has been exporting textiles,computer hardware,and software.The net result of trade is that Happyland exports far more goods and services and receives more income from abroad than it imports and pays abroad. -Transactions involving the export of Happyland's textile and computer products are included in its ________.

Scenario: Happyland Happyland,a country of about 48 million people with beautiful beaches,vast natural resources,and a highly skilled labour force,is encouraging foreign direct investment inflows.The country has been exporting textiles,computer hardware,and software.The net result of trade is that Happyland exports far more goods and services and receives more income from abroad than it imports and pays abroad. -Looking at Happyland's international trade situation,the country is experiencing a ________.

The automobile industry uses a ________ method of production.

A country's balance of payments is a national accounting system that records all payments to entities in other countries and all receipts coming into the nation.

The two main reasons countries intervene in foreign direct investment flows are to control the balance of payments and to obtain resources and benefits.

When a Canadian subsidiary in another country remits profits back to its parent in Canada,the receipt of profits is recorded in the ________.

Companies seek cross-border mergers and acquisitions for each of the following reasons EXCEPT to ________.

The ________ account includes income paid to entities in other nations that is earned on assets they hold in Canada.

Scenario: Global Manufacturing,Inc.(GMI) GMI is a fast-growing Canadian company that wants a production system that makes each of its product's two components in the location where the cost of production is lowest.The components will then be taken to maquiladoras for final assembly.GMI purchased an existing company in Brazil to produce component A and built a subsidiary in Thailand to produce component B. -GMI's company purchase in Brazil and subsidiary construction in Thailand would appear in which of the following?

One way a company can achieve market power is through ________.

The ________ theory states that a firm tries to establish a dominant presence in an industry by undertaking foreign direct investment.

According to the international product life cycle theory,in which stage of a product's life cycle does a company directly invest in production facilities in countries where demand is great enough to warrant such facilities?

What two factors propel growth in foreign direct investment?

A system of production in which each of a product's components is produced in the location where the cost of producing that component is lowest is called ________ production.